"Tesla intends to use the net proceeds from the offering to accelerate the growth of its business in the US and internationally, for the development and production of its "Gen III" mass market vehicle, the development of the Tesla Gigafactory, and other general corporate purposes," the company press release stated.

In offering $1.6 billion in convertible senior notes and an additional $240 million available for up to 30 days, the electric-car maker is gearing up to put forth that chunk of cash in partnership with a handful of other battery-producing companies, with some analysts estimating a total cost for the gigafactory in the realm of $5 billion or $6 billion.

The goal is to, by 2020, produce up to 500,000 third-generation Teslas, requiring a plant that could produce more lithium-ion batteries per year exclusively for Tesla than the total global output of 2013. Production on that scale, Musk has noted, won't begin ramping up until 2017. The factory may benefit Tesla not only in its own car production; such a plant could also poise the company for a major stake in energy storage and in supplying batteries to companies like Toyota.

Reports already peg Panasonic as a partner with a potential $1 billion investment in the project. Musk has said the gigafactory would likely involve more than one partner, and the Japanese giant -- currently the primary supplier of Tesla's lithium-ion batteries -- is reportedly inviting other Japanese materials suppliers to join it in an investment.

Tesla has already narrowed down location finalists to Nevada, New Mexico, Arizona, and Texas. Musk has outlined that the plant will be built to run on new sources of solar and wind power, and could generate up to 6,500 jobs.

Thanks to the gigafactory announcement, Tesla's stock has been rocketing skyward and hit a high of $259.20 on Tuesday following Morgan Stanley's raising of the company's target stock price to $320 a share. Tesla shares are currently up 5 percent Wednesday at $253. The official unveiling of Tesla's battery plant timeline and partners is slated to come later this week.

About the author

Nick Statt is a staff writer for CNET. He previously wrote for ReadWrite and was a news associate at the social magazine app Flipboard. He spends a questionable amount of his free time contemplating his relationship with video games while continuously exploring the convergence of tech, science and pop culture.
See full bio